Prevailing Wage FAQs

Posted on June 14, 2013 in Prevailing Wage

Contactors working on Prevailing Wage jobs often have questions about how to appropriately process payroll.  Every county has a different wage scale for each different type of work being performed.  Every contract may have its own unique provisions as well.  Failure to pay the appropriate wage can be a very costly mistake, and can even wipe out profits built in to the original bid.

At VistaCore we provide payroll for all types of companies.  Our niche is contractors, because we understand prevailing wage payroll.  We do it day-in and day-out.  So if you are confounded about the rules or if you’re wondering if you’re doing it right, consider outsourcing the job to us.  Click here to request a quote from us – you may find that we can save you money, time, and headaches!

 

Here are answers to some Frequently Asked Questions (FAQ) that our VistaCore staff is often asked about processing prevailing wage payroll.

Where do I get the prevailing wage schedule for the job we are on?

Each county publishes its own rates.  The General Contractor should be able to provide you with the rates for the job.

VistaCore keeps many of the wage schedules on file to assist our clients.

Is prevailing wage payroll required to be processed weekly?

Yes.  The Davis Bacon regulations require that employees working on a prevailing wage job must be paid weekly.

At VistaCore, we can process weekly payroll for field employees, and bi-weekly or semi-monthly payroll for other staff.

What if my employee works different prevailing wage jobs during the week?

It is important that the contractor track the time each employee works on each different job. 

At VistaCore we have made this easy with a cloud-based time tracking system, so employees can log their time in using their smart phone.

The General Contractor is asking me for a certified payroll report.  What is included on that?

The subcontractor must report to the general contractor the number of hours that each employee worked in each craft or classification during the week.  The report verifies that the base wages, overtime and fringe benefits were all calculated properly.

VistaCore can provide a certified payroll report for every job worked each week.

What state agency oversees prevailing wage payroll issues? 

In California the Department of Industrial Relations oversees prevailing wage payroll.  They may perform an audit on a job, or outsource the audit to a private company, to confirm adherence to their rules.

VistaCore has personal contacts at the DIR.

Why are the Prevailing Wage rates so much higher than rates for non-prevailing wage jobs?

The hourly rate on a prevailing wage job includes a base wage and a fringe benefit component.  These rates are often taken from the rates paid to union employees in the area.  Each employee’s paycheck must include 100% of the base wage as a minimum.

What can be paid with the fringe benefit component?

In general, the fringe benefit component of the prevailing wage can be used to pay a variety of expenses that the employer may otherwise be paying, including the following expenses:

  • Insurance premiums (health, dental, vision, life, disability, accident, etc.)
  • Retirement contributions (these are considered employer contributions to your retirement plan, and do not impact the amount that the employee may be contributing on his own.)
  • Vacation benefits

VistaCore offers an optional list-billing and hour banking service to its clients.

Can I pay the fringe benefit component to the employees in cash?

Yes, some or all of the fringe benefits can be paid to the employee in cash. 

Are there disadvantages for paying the fringe benefit in cash?

Yes.  If the employee is paid the fringe benefit as payroll, then the employer increases expenses for the following:

  • Increased payroll burden (employer taxes are paid on the fringe component if paid in cash)
  • Increased workers’ compensation premiums (calculated on paid wages)
  • Increased liability insurance premiums (for policies that take payroll into consideration for rates)

Does overtime impact the hourly fringe benefit rate?

No.  The fringe benefit does not have to paid at the increased overtime rates. 

The VistaCore system handles this calculation automatically.

Do I have to pay prevailing wage for travel time?

No.  Prevailing wages are required for “site work” only.

At VistaCore we can handle the travel time expense seamlessly.

What scale am I required to use if the rates changed during the project?

The prevailing wage scale that was in place at the time of your original bid is the scale that must be used throughout the project.

VistaCore is a fully integrated payroll, retirement and HR solution to all types of companies.  Contractors have been confused and subjected to penalties for prevailing wage payroll mistakes for years.  VistaCore offers you the following:

 

  • Improved profitability on prevailing wage contracts by reducing your payroll burden. 
  • Reduce risk & worry and free up more time to focus on profitability.
  • Leverage time, cash flow and human capital by outsourcing to us.
  • Single source solution to streamline and simplify your ongoing & annual administrative tasks.
  • Benefits neutral use your current providers for benefits and retirement.
  • Simplified pricing a fixed amount per employee per month

 

Click here to have a VistaCore representative contact you today.  We offer guidance, not guesswork.

 

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